Taxes or jobs?

Arnold  Garbanzos
First of two parts

ILIGAN City–Iligan must change its perspectve in order to grow economically.

While the liquidator and the city fight over Global Steel to determine which has the legal right over the Iligan mill, Mr. Pramod Mittal waits on the sidelines awaiting the final result till October 2017 since he is not party to the squabble. Meanwhile, the 200 to 300 employees of Global Steel and their families suffer. I really wonder who is taking care of them? Since they are now all aware that Global Steel is not a party to the fight between the city and liquidator. Global Steel was simply caught in the crossfires–a victim of wrong economic thinking.

Is tax collection really the main priority of our city or is it taking care of the employment of our people? To say that it is tax collection over the employment of its people is the most myopic, cruelest and narrowest perspective for a city. Taxes will always come, the greater share of which comes from the IRA of our national government. Whether the city government collects from the liquidator or not, the LGU will always have the money since it has several  income streams while the ordinary Global Steel worker has none.

The local leadership should change its position; it should prioritize the jobs of our people and generate employment. Reopen the mill as soon as possible.

Collect the taxes later, once the plant is up and running. You cannot squeeze water out of a stone. Think of the 200 to 300 families and their welfare–they are more important than taxes. Give them back their jobs and the taxes will come. Its a natural consequence of a healthy economic outlook.

Global Steel or National Steel is the lifeblood of the Iligan economy. It is also not just another ordinary company since the Iligan mill represents the entire steel industry of our country especially our flat steel capability nationwide.

By prioritizing taxes over job creation and employment, the city has missed out on opportunity gains like downstream industries–auto-making, ship-building and prefab steel house facilities–capable of generating taxes and economic activities far beyond the P5-billion tax collectible pursuit  of the city from the liquidator.

I have always wondered what legal basis the city used to levy and possess the Iligan mill when it has lost all its  cases to the NSC liquidator from the RTC, the CA and the Supreme Court?  This is the reason why the liquidator has the boldness to put all our local officials under contempt since there is not one case the city has won. On top of that, there is a SEC injunction or stay order advising all parties concerned that the Iligan mill is not subject to levy or possession or repossession since it is still under liquidation. Is our city really above the law?

To sacrifice an entire industry and thousands of jobs simply because the city has an issue with the seller (liquidator and the banks) to the detriment of the buyer (investor), the Indians of Global Steel, is the worst economic decision the city of Iligan has ever made. Surprisingly, the bad decisions were not made only by the current administration but by several past administrations whose primodial economic perspective was the concern for tax collection rather than job generation.

Any decision to collect taxes for taxes alone but at the same time sacrificing the general welfare of  its own people by closing down a plant and sacrificing thousands of jobs is like killing the goose which laid the golden egg. Its only fault was that it can only produce one egg at a time much to the consternation of the greedy owner who wants it to produce a dozen eggs at a time.

I think the worse fault of Mittal was because he became gullible to the sweet-talk of our local people, both politicians and technocrats. He trusted us and signed a defective contract whose effect is not only worse for him but also for our city. Mittal was negligent but bad faith was not with him.

Take note that the case in Singapore was not filed by the liquidator for non-payment by the Indians. The case in Singapore was filed by the Indians of Global Steel against the liquidator for non-compliance to Asset Purchase Agreement (APA) conditions. That should be the right perspective over the entire matter. (to be concluded tomorrow)